Dear Community Banker,
The first month of the new Trump administration and 119th Congress have brought a flurry of policy activity aligned with ICBA’s “Repair, Reform, and Thrive” plan.
The suspension of new Consumer Financial Protection Bureau rulemaking, congressional efforts to overturn the bureau’s 1071 and overdraft rules, and ICBA’s testimony at two simultaneous hearings on community banking issues have shown that Washington is responding to our calls for much-needed policy change, though some reform efforts could have unintended consequences for community banks without key changes.
To continue to support community banks as the engines of local economic development while avoiding unintended consequences, ICBA on Friday called on Office of Management and Budget Director Russell Vought—who is serving as acting director of the CFPB—to advance key policies under our “Repair, Reform, and Thrive” framework.
Fast-tracking meaningful regulatory reform
In our letter to Director Vought, ICBA asked the administration to quickly repeal excessively burdensome regulations and reissue rightsized rules that will truly benefit consumers and support economic growth, including revising the CFPB’s 1071 and 1033 rulemakings. Because new 1071 and 1033 rulemakings would contradict President Trump’s Executive Order on deregulation, ICBA is requesting an exception that policymakers could fast-track to quickly address these problematic CFPB regulations.
Ensuring community bank representation
ICBA also urged the administration to ensure meaningful community bank representation in supervision and oversight. To do that, we encouraged policymakers to reconstitute FDIC and CFPB community banking advisory committees following their recent dissolution by Executive Order, prioritize executive appointments with leaders who have direct community banking experience, and include community bank and state banking regulators in discussions on streamlining regulatory processes and agency reforms.
Promoting a level regulatory playing field
Finally, ICBA noted that recent actions addressing the CFPB’s flawed structure have had the unintended effect of leaving nonbanks and Wall Street institutions operating without supervision while community banks continue to face consumer compliance scrutiny from their prudential regulators.
To reverse this widening of the already-uneven supervisory playing field, ICBA urged the administration to strengthen compliance oversight of nonbanks, resume consumer compliance examinations of large financial institutions supervised by the CFPB, and restore regulatory certainty so community banks are not vulnerable to civil liability.
Advancing a balanced regulatory environment
While the Trump administration’s efforts to fundamentally reshape federal regulations offer an opportunity to substantially reduce regulatory burdens and restore balance to federal financial oversight, we must take steps to ensure that community banks continue to have a seat at the table. ICBA will continue to track and interpret developments and collaborate with policymakers to establish a regulatory environment that fosters economic growth and maintains financial stability.
You and other community bankers can make an impact by using ICBA’s Be Heard Grassroots Action Center to urge support for congressional resolutions to overturn the CFPB’s overdraft rule and by coming to the nation’s capital to attend ICBA’s Capital Summit in May. With so much at stake, there’s never been a better time to make your voice heard.
Thank you for all you are doing to make a positive difference in Washington while serving your local communities at this busy and auspicious time. Let’s continue working together to advance crucial policy changes that will strengthen local communities for years to come.
Sincerely,
Rebeca Romero Rainey
ICBA President and CEO
